Given the overlap of cortical and subcortical (limbic) structures involved in olfaction, emotion and depression, the study of olfaction may hold particular promise for elucidating neurophysiologic dysfunctions associated with abnormalities of emotional reactivity and anhedonia in depressed patients. There has, however, been relatively little study of olfactory function in depressed patients and existing studies have been limited by lack of neurophysiologic measures and methodological difficulties. We propose to develop a new direction of research, in which multichannel event-related brain potentials (ERPs) will be measured in depressed patients and healthy controls to pleasant and unpleasant olfactory stimuli. This will take advantage of existing methods for precise control of olfactory stimuli (olfactometer) and also new data analytic techniques in the electrophysiologic domain. Current source density (CSD;surface Laplacian) and temporal principal components analysis (PCA) are combined to yield reference-free measures of radial current sources corresponding to meaningful olfactory ERP components. Also, high and low concentrations of pleasant and unpleasant odors will be selected on the basis of psychophysiologic measurements, which will allow separate assessment of emotional valence and intensity effects. In addition to brain ERPs, bilateral electrodermal activity (EDA), which typically accompanies emotional processing, will be recorded to provide sympathetically- mediated measures of autonomic arousal to the olfactory stimuli. After preliminary psychophysical measurements, we propose to test 30 unmedicated depressed patients and 30 healthy controls matched for gender, age, handedness, smoking history, and ethnicity/race. ERP, EDA and behavioral measures will be obtained to high and low concentrations of pleasant and unpleasant odors during a detection task, which is designed to minimize cognitive-evaluative processing. Separate judgments of odor intensity/valence will also be obtained, along with standard behavioral tests for assessing odor detection thresholds and odor identification. Interviewer-based and self-ratings of psychopathology will be used to examine the relation of ERP and behavioral olfactory deficits in patients to anhedonia and other symptoms of depression. Anhedonia is a cardinal diagnostic feature of major depression. Increased understanding of its neurophysiologic basis could lead to improved identification of diagnostic subtypes and new markers for prediction of treatment response. The study of olfaction in depressed patients should provide a new window for measuring and understanding abnormalities of emotional reactivity, such as reduced experience of pleasure in depression. This could also lead to development of new methods for diagnostic assessment and treatment selection.